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We will soon be a year into the Covid-19 pandemic. Are you rolling in new wealth? No? Too bad you are not a billionaire.
With millions of deaths, unemployment soaring, millions threatened with losing their homes and economies struggling around the world, the world’s billionaires are doing fine. More than fine. So fine that they have added trillions of dollars to their composite wealth.
In other words, capitalism as usual. Or even better than usual, depending on your point of view and bank account.
Before we throw around some numbers, here’s one way of putting the pandemic into perspective: The world’s 10 richest people have seen an increase in their wealth that is larger than the cost would be of vaccinating every person on Earth. That calculation comes courtesy of Oxfam, which reports those 10 people increased their net worth by about US$500 billion since March 2020. They could finance a comprehensive global response to the pandemic and still have all the obscene wealth they possessed a year ago.
Naturally, billionaires in the center of the world capitalist system are no slackers here. In the latest of a series of reports on this issue, the Institute for Policy Studies reported at the end of January that the 660 billionaires of the United States had hoarded a composite total of $4.1 trillion, a nearly 40 percent increase in their wealth from the start of the pandemic. That total is in contrast to the $2.4 trillion in total wealth held by the 165 million United Statesians who constitute the bottom 50 percent of the country’s population.
As outrageous as this inequality on steroids has been, there are those who believe that billionaires taking advantage of a global crisis is a cause for celebration.
One example is a report issued by one of the world’s biggest banks, UBS, and Big Four accounting firm PricewaterhouseCoopers. The authors of the report, “Riding the storm: Market turbulence accelerates diverging fortunes,” can hardly contain their enthusiasm at how successful their clients have been during the pandemic. UBS and PwC “have unique insights into” billionaires’ “changing fortunes and needs” and in the report breathlessly extol “a time of exceptional, Schumpeterian creative destruction” by “billionaires [who] live in turbulent but trailblazing times.” As you can already surmise by the tone-deaf writing, the report is intended as a celebration of vast wealth inequality and is written in a style that comes as close to that of Hollywood celebrity publicists as you are likely to find produced by bankers and accountants.
The report breathlessly declares that “Some 209 billionaires have publicly committed a total of USD 7.2 billion” in donations, written within a passage told in solemn tones intended to make us gasp in awe at the selflessness of the international bourgeoisie. Yet we soon enough read that the wealth of the world’s billionaires totaled US$10.2 trillion in July 2020. For those of you scoring at home, that $7.2 billion in proposed donations represents 0.07 percent of their wealth. The average working person donates a significantly bigger portion of their income.
In just three months, from April to July 2020, the world’s billionaires added $2.2 trillion to their wealth! Technology billionaires did particularly well during the pandemic, the UBS/PwC report says, due in large part to the surge in technology stock prices. During the first seven months of 2020 alone, technology and health industry billionaires saw their wealth increase by about $150 billion. Yes, never let a crisis go to waste.
The number of the world’s billionaires, the UBS/PwC report tells us, is 2,189. To put these numbers in some kind of perspective, there are exactly two countries in the world (the United States and China) that have a bigger gross domestic product than the wealth of those 2,189 billionaires. Or, to put it another way, their wealth is greater than the economic output of Japan, Germany and Britain, the countries with the world’s third, fourth and fifth largest GDPs and which have a combined population of 277 million.
Wall Street has been amply taken care of in the current economic crisis, as it was in the wake of the 2008 collapse, and industrialists also have had massive amounts of subsidies and tax cuts thrown their way. For working people, crumbs. The Federal Reserve, the U.S. central bank, committed US$5.3 trillion to corporations on its own initiative in the first weeks of the pandemic, and most of the $2.5 trillion offered in the two 2020 congressional stimulus packages (the CARES Act of March 27 and the supplement of April 24) went to big business. (There was nothing unique about that as Canada, Britain and the European Union pushed through similar programs.)
There is plenty that could have been done with the towering piles of money thrown at financiers or with the wealth that trickled up to the most wealthy. The $1.1 trillion in gain in billionaire wealth, for example, is double the two-year estimated budget gap of all state and local governments, which is forecast to be at least $500 billion. By June 2020, state and local governments had already laid off 1.5 million workers while public services, especially education, faced steep budget cuts. The Economic Policy Institute predicts that if federal aid is not forthcoming, as many as 5.3 million public-sector jobs — including those of teachers, public safety employees and health care workers — will be lost by the end of 2021.
As difficult as the damage inflicted by the pandemic has been, it is no surprise that the least well off in the advanced capitalist countries and most everybody in the Global South has it the hardest. In the first months of the pandemic, the International Labour Organization issued a report predicting that half of the world’s working people are in danger of disaster, forecasting that “1.6 billion workers in the informal economy — that is nearly half of the global workforce — stand in immediate danger of having their livelihoods destroyed” and that “The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally.”
Destruction this certainly is, but by no rational measure is it “creative,” Schumpeterian or otherwise. Unfortunately, capitalists have usually understood their class interests better than do the world’s working people in what remains a most one-sided class war.